Contango Silver & Gold

I’d like to thank the Mining Forum for putting this on and inviting us back to give you an update. Of course, I will be making forward-looking statements, so draw your attention to our disclosure there. So I’m gonna talk to you about our four projects, which is really four districts. Our Manh Choh Mine is in production. Our Lucky Shot project is advancing to feasibility. And Johnson Tract and Kitsault are advanced exploration stage projects. So I’ll fill you in on all four.

We have a five-year plan to grow our current production of 60,000 ounces of gold to 200,000 ounces of gold and 5 million ounces of silver. And the lion’s share of that comes from our Johnson Tract and Kitsault projects. But our growth pattern to there is fully funded from our existing cash flows from Manh Choh, with Lucky Shot as an intermediary step to get that into production and continue to grow the production profile.

This is my we’re undervalued slide. When we look at this, what stands out here is our high grades for the portfolio. This is all of our projects on a silver basis. You could do the same slide on a gold basis. We’re trading at a very low multiple, and I believe we will re-rate as we continue to execute and demonstrate that our projects are staying on track to get into production as Manh Choh continues to generate cash. We have a five-year plan. We’re executing that. I’ll go through that in more detail a little bit later. But as we advance the projects and get them towards a production decision, I think the share price will re-rate.

And again, this is all self-funded, tier one jurisdictions, and we have 33 million shares outstanding, and we’re gonna stay that way until we get all of our projects towards a production decision. So in North America, Alaska, and British Columbia, on a global basis, 2 million ounces of gold in reserves and 83 million ounces of silver. Again, we have 33 million shares outstanding. We trade both in New York and Toronto. We are a US-domiciled company, and all of our numbers are in US dollars, just to make that clear.

So our Manh Choh Mine is in production. It’s a joint venture between ourselves and Kinross. Kinross is a 70% owner and the operator of the mine. We found the project, and we proactively made a decision not to put it into production ourselves. One, it was a million ounces, very high grade, eight grams open pit. But two, it would have taken probably five to ten years to permit that project. That’s how long it takes to permit particularly tailings facilities in the United States. We knew that Fort Knox Mill had excess capacity, and so we entered into an arrangement with Fort Knox and Kinross to process the ore at the Fort Knox site.

So we mine at Manh Choh, and we put the ore into trucks. We don’t do anything to it. It just goes from a stockpile into the truck and then 240 miles up to the Fort Knox mill. We got this permitted and into production in three years, forming the joint venture with Kinross, completing a feasibility study on a DSO approach, we call this a DSO, direct shipping ore approach, and doing the construction work that needed to get done to get into production. By July of 2024, we were producing gold for a half year of production that year.

2025 results, we produced 60,000 ounces of gold, right on target. Our all-in sustaining costs were a little over $1,600, and we generated basically a dividend from the joint venture of over $100 million. This year, we’re transitioning from the north pit to the south pit, so there’s a lot of pre-stripping going on, so our production is lower than average at guiding 40,000 to 45,000 ounces, and our costs are higher because we’re doing all that pre-stripping on the south pit. We’ll get the benefit of that next year when our production, we’re guiding towards 75,000 to 80,000 ounces of gold production. Again, that’s our share of production.

And we’re looking at cash costs that are in the, Kinross is guiding at $1,300, $1,400, but I think we’re gonna see some cost creep particularly on the price of diesel, obviously with our transportation of ore to the mill. We’re seeing a little increase in costs there for the transportation segment. But still very good cash costs. We’re probably gonna guide towards $1,700. We’ll get new updates from Kinross here towards the end of the year. But very strong cash flows. At today’s gold price, I think next year we’ll be looking at close to $200 million of free cash flow to Contango.

One of the things that was creating downward pressure on the stock, in order to get our project in production, we had to borrow money from the banks, and they made us hedge. And so we got rid of the hedges. We delivered aggressively into the hedge book. We raised some equity, took care of part of the hedge book, and then finally we transferred the last bit of the hedges, converted that into debt. So we have about $45 million of debt, which will get paid off between now and June of next year. So we’ll be hedge-free. We are hedge-free now, but we’ll be debt-free by June of next year.

This is, in essence, the direct shipping ore model. You mine it, you put it in a box or a truck, you transport it either by truck or rail or barge to a processing facility. No mill, no tailings facility, and no large power plant to run all that. That really reduces your environmental footprint and shortens the timeframe to permitting because all you’re permitting really is a quarry operation, either open pit or underground. In the case of Lucky Shot, Johnson Tract and Kitsault, those are all going to be underground mines, so very, very small footprints.

This is the beauty of the DSO model. What you need is grade. Grade is king, so you’ve got to have a high grade. You have to be close to existing infrastructure, and if you’re close to the water, you’re close to infrastructure. And what we like in Alaska is private land. Permitting on federal land can take a long time because the whole country gets to have an opinion as to what’s the best use of that land. If you’re working on private land, the landowner gets to make that decision. In the case of Manh Choh, that’s the Tetlin tribe. They’re very, very happy with having the mine on their land. They’re making a nice royalty. In the case of Lucky Shot, we own the land. It’s our land. We own it 100%. In the case of Johnson Tract, it’s an Alaska Native corporation, Cook Inlet Regional Inc., who selected the land specifically for mining. So we have a good working relationship with them as well, obviously.

So our next project that we successfully get into production will be Lucky Shot. We have a small high-grade resource outlined there. This was a mine that was historically in production between 1928 and 1942. Produced about a quarter million ounces of gold from very high grades that were underground mined. Now they selectively mine and hand cob the ore. We’re not going to produce 40 grams per ton. I wish we could. We’re shooting for something on a mineable grade of 10 to 12 grams per ton. We’ve got a 14.5 gram resource outlined to date. We’re underground drilling now. We did some surface drilling during the summer. And we’re going to complete a little over 20,000 meters of drilling, we started last December and we’ll drill through about February of next year. Then turn that into a mineral resource estimate.

So our objective is to outline 400,000 to 500,000 ounces of gold in that 14 gram range and then subset that into 250,000 ounces that can be processed, 50,000 tons, sorry, 50,000 ounces a year production profile. High grades, 10 to 12 grams is what we’re shooting for in terms of mine diluted grade. Now when you drill, you find new things. And this year we’ve made a new discovery called the KM vein. It’s at right angles to the traditional Lucky Shot vein system. You see the grades here are very high and they’re decent thicknesses, mineable thicknesses. So we’re underground drilling that out as well as continuing to drill the main Lucky Shot vein structure that had been historically mined.

This is narrow vein underground mining. So you need to do a lot of drilling. We’re drilling on 25 meter centers and fan drill shots that are about 15 meter separation. So very, very detailed. Again, the plan, get 400,000, 500,000 ounces of resource, convert 250,000 ounces of that into a five-year mine plan delivering 50,000 ounces a year. And obviously as an underground mine, you’ll just keep exploring and extending that mine life. The Kensington mine has had a five-year mine plan for 25, 30 years now. So that’s what we’re looking at here. It’s very close to infrastructure and it’s a fully permitted mine now, today. So we’ve put rocks in the box and sent them up to Fort Knox. That’s completely permitted. And that effectively is the plan. Fort Knox has plenty of capacity to do this. And based on my discussions with them, they’d love to have the ore.

Next up is Johnson Tract. Now this is a beautiful mine. It averages 40 meters wide, 9.5 grams per ton. It’s polymetallic, 70% gold, silver, 30% copper, lead, zinc. It’s open at depth because the ore body dips at about 75 degrees and the mountain goes straight up. So there’s not that many places you can get a drill rig on it. We’ve done as much drilling as we can from surface. What we’re doing now is going underground. We’ve permitted that with the state of Alaska. Meanwhile, we’re permitting a road and a barge landing facility through the federal permitting process called Fast 41. We expect to get our permits there by May of 2028.

This year we built the road there between our camp and the proposed portal site. Again, the portal is completely permitted. Next year we’ll move the equipment in to start building the tunnel. It’ll take us a little less than a year to build the tunnel. It’s about 1.4 kilometers long. And then the following year in 2028, we’ll get the drilling completed and a feasibility study, a DSO feasibility study done. And when I refer to a feasibility study for a direct shipping ore mine, what we’re talking about is a mine plan, a transportation plan, which is putting rocks in a box and transporting them to a facility either by road, rail, or barge. And then the permitting of the road down to the site. That’s what we’re doing with Fast 41. So we’re not talking about building a mill here and a tailings facility or a power plant. So that’s what really shortens the timeframe of permitting and obviously lowers your capital costs significantly in terms of what you’re building at this site.

You can see the NPV of the project. We did an initial assessment a little over a year ago now, $4,000 gold. This is a $600 million NPV. That is about the market cap of Contango Silver & Gold today. So one of our four projects is our complete market cap on the company right now. I think, again, that’s another reason why I think we’re due for a re-rate going forward here.

So this year we completed three miles of road, we built two bridges, and we prepared the camp facility for wintertime operation. We’ll complete that next year while we’re building the tunnel so we can just work all year round. We expect this project to be in production by 2030, and with the time frame that we’ve outlined, get the tunnel in in ’27, get the drilling done in ’28, and start building the road down to the coast and the barge landing facility in ’29. By 2030 we should be able to be in production. Capital costs here are about $215 million, of which we’ve just spent $20 million building the road in the laydown area for the underground.

Last up is Kitsault. This is our silver-rich asset. It’s a district. We just put out a mineral resource estimate here last week. 89 million ounces of silver equivalent, very good grade. That’s in the indicated category. You combine those, you’re looking at an average grade of silver about 350 grams per ton. That’s roughly ten ounces per ton. This is gonna be a beautiful mine. These are three to 15-meter wide veins and vein breccias. You can see the transfer of inferred up to indicated. This is based on about 175,000 meters of drilling that were done by Dolly Varden Silver before we merged and became Contango Silver & Gold.

Now this year, we’ve completed 53,000 meters of drilling. In fact, one rig is still turning right now. It’s about ready to shut down in a week or so. Couple of things. We’re gonna obviously incorporate that into a new MRE, which we plan to have done by about March of next year, and then use that to complete an initial assessment, very much like we’ve done with Johnson Tract, to give people an idea of what the value of this thing is. Now another thing I’ll mention, we’re just starting to release results a couple of weeks ago. I think we have initial results from this year’s drilling. We’ll be releasing results between now and the end of the year.

One of the things we noticed when we did the MRE that we just released, we had eight different separate deposits, and we noticed in several of them that they were across the valley, like Torbrit and Northstar, same level, similar looking mineralization. They were separate because there was no drilling between them. It’s a tough place to drill down in the steep valley bottom there. So we’ve done drilling there now. We’ve set up these enormous drill pads on steep terrain, and we’re starting to connect these things. Why that’s significant is because now we need one tunnel to access these two deposits, not two.

The other thing, one of the last drill holes we drilled in 2025, hole 470, intersected, and this was on the Wolf deposit, which is about a kilometer to the north of the Torbrit Northstar area. Wolf’s got about 25 million ounces of 450 gram per ton resource. We drilled on the other side of a large structure that we knew about, the Central Valley Fault, and we hit a very small intersection of about half a meter of 500 grams per ton silver. That’s half a kilo of silver. That was interesting. So now this year we followed up on hole 470, and we’ve developed now what we call the 470 zone, which is connecting Wolf to Torbrit Northstar. And from a mining standpoint, that starts to bring all five deposits together in terms of developing not just every individual deposit, but all five deposits that start to come together. So good progress we’re making there.

It’s all about execution in the end. And this year, we’ve mapped this out for between now and 2030. What do we need to do each year to stay on track? Again, using our cash flow from Manh Choh to build Lucky Shot, using that combined cash flow to build Johnson Tract and Kitsault. This year we executed. We got everything done that we said. We built three miles of road at Johnson Tract. We did 53,000 meters of drilling at Kitsault rather than the 40 that we had planned to do. So we did more, and at Johnson Tract, we built the road. At Lucky Shot, we made a new discovery in the KM vein. So we’re executing. We did everything safely. We did it on time and under budget. And that’s what we plan to keep doing year after year. We’ve got the cash flow to do it. We can do all this and maintain 33 million shares outstanding.

Now, what is our objective with Contango Silver & Gold? It’s to become the next Hecla. Hecla’s a $10 billion market cap company. We’re a $600 million market cap company. We operate in safe jurisdiction, Alaska, BC, US, and Canada. High grades, gold and silver. And we’ve got a growth profile from our current 60,000 ounces of production towards 200,000 ounces of gold and 5 million ounces of silver in four districts that we’ll continue to explore and continue to find more silver and more gold. That’s our objective. It’s all about execution, and this year I think we executed, like I said, safely, on time, and under budget. I think we’ve got some time for questions.

So you mentioned that targeting $100 million per year from Manh Choh cash flow to fund exploration activities on the other two primary projects we have.

Having a hard time hearing you, sorry.

Oh, sorry. So you’re planning to fund the exploration from the $100 million per year from Manh Choh cash flow. Does it go into the execution and construction period as well, or do you have any further financing plan for those two?

Right now, the only financing plans we have would be to buy our own mill facility. We’re looking at a couple different options. There’s an existing mill in our Kitsault neighborhood that is idle. That’s a potential to acquire. And then there’s something else in the neighborhood that is fully permitted. It was a mine. The mine’s gone. It was a molybdenum mine. But the permits are still in place for that to be able to process and store tailings. And so that’s something we’re assessing right now as to whether we build our own new tailor-made facility for direct shipping ore, or do we modify an existing mill that’s idle. Those are our two options. That’s the only capital we plan to raise, would be to do one or the other of those.

Okay, thank you very much.

Thank you.